MasterCard reveals further foray into cross-border payments world

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Daniel Webber
Daniel Webber
Founder & CEO
Daniel is Founder and CEO of FXcompared and has 18 years of experience in the international finance world focusing on cross-border payments, technology and the property sectors. Daniel is widely… Read more
  • Nets, which is a European firm, will be purchased by MasterCard for billions of euros
  • Infrastructure, better user services and more are all expected to improve for MasterCard customers
  • “We are a multi-rail company – this deal further demonstrates the strength of our strategy”, says MasterCard

Well-known payment services provision corporation MasterCard has announced that it will invest in the Corporate Services arm of a Scandinavian payment technology company.

MasterCard will invest almost €3 billion euros into Nets, a PayTech firm which offers a range of products including clearing services, instant payments and more.

The acquisition will give MasterCard a majority share in the firm. The exact price of the move was made public, with Nets believed to have received €2.85 billion– which is equivalent to just under $3.2 billion US or £2.6 billion British pounds.

MasterCard has confirmed that the agreement will be what is known as dilutive for a maximum period of two years, which means the value could change due to new shares being issued.

However, this period is expected to end in the first six months of next year.

MasterCard will now harness the best of Nets’ technology in its own remittance services, and offer it on to customers. It is believed that the main focus will be on what are known as account-to-account capabilities (A2A).

This will help MasterCard’s customers to experience better real-time payment services.

It will also help MasterCard to improve three of its strategic areas: infrastructure, applications for the user, and better value-added services.

These applications are likely to include common spending routines such as settling bills. On a more strategic level, it is expected that MasterCard’s data analytics function will be enhanced, while it will be better placed to fight financial crime.

As is common in acquisition cases as a result of demand for fast payments, speed will also be enhanced.

The flexibility of the systems MasterCard will acquire from Nets will also help the company and its clients to navigate the minefield of open banking, which is a pressing issue due to the Mifid II regulatory system.

According to MasterCard’s chief product and innovation officer Michael Miebach, this was just a further example of the firm’s status as a “multi-rail company”.

“The global opportunity for real-time payments is accelerating”, he said.

“This deal strengthens our unique position as the one-stop partner for any bank, merchant or government’s payment needs. The combination with existing MasterCard assets such as Vocalink, Transfast, and Transactis delivers real-time payment capabilities, innovation and expertise that are truly differentiated.

“We are a multi-rail company – this deal further demonstrates the strength of our strategy, staying ahead of the changing landscape, delivering essential choice to banks, businesses and consumers”, he added.

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